Cost-effectiveness of direct-acting antivirals for chronic hepatitis C virus in the United States from a payer perspective

BACKGROUND: Direct-acting antivirals (DAAs) have been a breakthrough therapeutic innovation in the treatment of chronic hepatitis C virus (HCV) with significantly improved efficacy, safety, and tolerability. OBJECTIVE: To evaluate the cost-effectiveness of treating patients with HCV with DAAs compared with pre-DAAs or no treatment over a lifetime horizon from the perspective of the US Veterans Affairs (VA) health care system. METHODS: A hybrid decision-tree and Markov model simulated the health outcomes of a cohort of 142,147 patients with HCV with an average age of 63 years. Demographic data, treatment rates and distribution, treatment efficacy by subpopulation, and health state costs were sourced from VA data. Treatment costs and utility values were sourced from publicly available databases and prior publications for older regimens. RESULTS: Over a lifetime horizon, the use of DAAs results in a significant reduction in advanced liver disease events compared with pre-DAA and no treatment. Total cost savings of $7 and $9 billion over a lifetime horizon (50 years) were predicted for patients who received DAA treatments compared with patients treated with pre-DAA treatments and those who were untreated, respectively. Cost savings were achieved quickly after treatment, with DAAs being inexpensive when compared with both the pre-DAA and untreated scenarios within 5 years. The DAA intervention dominated (ie, more effective and less costly) for both the pre-DAA and untreated strategies on both a per-patient and cohort basis. CONCLUSIONS: The use of DAA-based treatments in patients with HCV in the VA system significantly reduced long-term HCV-related morbidity and mortality, while providing cost savings within only 5 years of treatment.


RESULTS:
Over a lifetime horizon, the use of DAAs results in a significant reduction in advanced liver disease events compared with pre-DAA and no treatment. Total cost savings of $7 and $9 billion over a lifetime horizon (50 years) were predicted for patients who received DAA treatments compared with patients treated with pre-DAA treatments and those who were untreated, respectively. Cost savings were achieved quickly after treatment, with DAAs being inexpensive when compared with both the pre-DAA and untreated scenarios within 5 years. The DAA intervention dominated (ie, more effective and less costly) for both the pre-DAA and untreated strategies on both a per-patient and cohort basis.

Plain language summary
This study compared the costs and clinical benefits of direct-acting antivirals (DAAs) vs pre-DAAs or no treatment for hepatitis C virus (HCV) among veterans. DAAs reduce the risk of liver disease. DAAs are also safe for patients with HCV infection. The effect of DAAs on health care costs in the United States is less well characterized. Study findings suggest that DAAs provide cost savings within 5 years of treatment. DAAs are more effective and less costly than pre-DAAs or no treatment.

Implications for managed care pharmacy
The use of DAAs in patients with HCV in the US Veterans Affairs (VA) health care system was projected to substantially reduce advanced liver disease and mortality vs pre-DAA treatments. Over a lifetime horizon, cost savings of approximately $7 and $9 billion were predicted for DAA vs pre-DAA and no treatment strategies across all patients with HCV in the VA health care system. The evaluation of DAAs from the VA health care system perspective is important given that VA developed a national strategy to eradicate HCV infection.
Hepatitis C virus (HCV) is the most common blood-borne infection in the United States, with an estimated prevalence of 6.4 million. 1 HCV infection causes progressive hepatic inflammation frequently leading to cirrhosis, end-stage liver disease, hepatocellular carcinoma (HCC), and liverrelated death. [2][3][4][5] Pegylated-interferon (PEG-IFN) and ribavirin (RBV) were used to treat patients with HCV prior to the approval of direct-acting antivirals (DAAs) and were also used in combination with HCV NS3/4A protease inhibitors, telaprevir, and boceprevir. 6 These drugs were associated with low rates of treatment uptake owing to low efficacy, unfavorable safety profiles, and multiple contraindications. 7 The HCV treatment landscape has dramatically evolved since 2013 with the introduction of DAAs, 8 which have high efficacy rates, excellent tolerability, and ability to be safely prescribed to nearly all patients regardless of HCV genotype, cirrhosis status, treatment experience, and hepatic decompensation status in contrast to treatments available prior to 2014 (ie, pre-DAAs). [8][9][10][11][12][13] DAAs have demonstrated initial sustained virologic response (SVR) rates of greater than 95%, 10,11 whereas PEG-IFN-based and RBV-based treatments have low SVR rates (40%-50% for genotype 1 and 55%-65% for genotype 4 patients). 14 Further, DAAs have a shorter treatment duration (8-12 weeks) than PEG-IFN-based and RBV-based treatments (24-48 weeks) 14 ; hence, DAA treatments require less monitoring and positively impact adherence. 15 Achievement of SVR reduces liver disease progression, thereby decreasing hepatic decompensation, hepatocellular carcinoma, and overall mortality. 12, 13,16,17 Although improvement of clinical outcomes from the application of DAA therapy has been well established, the impact of DAA on health care costs in the United States is less well characterized. HCV elimination, a goal set by the World Health Organization by 2030, requires significant resource allocation but could result in long-term savings to health systems. 18 In 2014, bolstered by a congressional allocation to treat HCV in all veterans, 5.4% of whom were infected with HCV, 19 the US Veterans Affairs (VA) health care system developed a national strategy to eradicate HCV infection. 20 The presence of a national electronic medical record, high patient retention, and comprehensive cost accounting information make the VA the optimal clinical setting to evaluate the value of these medications from the perspective of a VA health care system. The objective of this study was to evaluate the cost-effectiveness of treating patients with HCV with DAAs compared with pre-DAAs or no treatment over a lifetime horizon from the perspective of the VA system.

MODEL OVERVIEW
A previously developed lifetime Markov cohort model was adapted to project the impact of treatment with DAA or pre-DAA regimens (or no treatment) on health and economic outcomes from the perspective of the VA health care system. 21 A time horizon of 50 years was modeled assuming patients who enter the model will reach death based on the life tables of the US population. 22 Health and economic outcomes were discounted at an annual rate of 3%. 23

MODEL STRUCTURE
A previously developed hybrid decision-tree Markov statetransition model 21 was used for this study (Figure 1). A cohort of patients with chronic HCV entered the model at different stages of liver disease (noncirrhosis [NC], compensated cirrhosis [CC], or decompensated cirrhosis [DCC]) and received active treatment with a market basket of DAA treatments, pre-DAA treatments, or no treatment. Patients who did not achieve SVR at week 12 (SVR 12) were defined as patients within the model who experienced disease progression, including advanced liver disease; those who achieved SVR experienced either significantly slower or no further disease progression depending on the stage of liver disease at model start. For each 1-year cycle length, patients either stayed in or transitioned between the following health states: NC, CC, DCC, HCC, liver transplant (LT), post LT, and liver-related mortality (death due to HCV).

DATA SOURCES
Demographics, treatment rates and distribution in both the pre-DAA and DAA eras, treatment efficacy by subpopulation, health state costs, and transition probabilities for patients without SVR were sourced from an analysis of patients with HCV in the VA setting.

PATIENT POPULATION
Data regarding patient characteristics were sourced from the VA data (data on file, available for review upon request). All VA patients (defined as having at least 1 primary care visit within the previous calendar year) with a positive HCV RNA by a qualitative or quantitative polymerase chain reaction (PCR) test were included. Age at diagnosis and treatment, race/ CONCLUSIONS: The use of DAA-based treatments in patients with HCV in the VA system significantly reduced long-term HCV-related morbidity and mortality, while providing cost savings within only 5 years of treatment.
patients previously treated for HCV was 15% and the distribution of liver disease stage was assumed to be 73%, 20%, and 7% across NC, CC, and DCC, respectively. The proportion of patients treated in the DAA scenario comprised 85% (n = 120,825) and the pre-DAA scenario comprised 12% (n = 17,058) of the model cohort and was reflective of the number of patients treated in the VA system between 2014-2019 and 2008-2013, respectively. The untreated scenario included 100% of the population; no patients were assumed to be treated in the no-treatment scenario.

ANTIVIRAL THERAPY
Data regarding antiviral medication use were sourced from the VA data (data on file). All released prescription fills for HCV antiviral therapy including various interferon-α preparations, RBV, sofosbuvir (SOF) mono-and combination therapies (SOF/ledipasvir were chronologically arranged for each patient to determine the specific combination of concomitant medications and treatment start date. Treatment completion was assigned as 28 days after the final release for a specific regimen, and the first date for possible assessment of SVR12 was assigned to 84 days after treatment completion. Each course of therapy was based on post-SVR12 date HCV PCR results and characterized as cured, relapsed, or untested if no PCR test was available.

COMPARATORS
The model evaluated 3 scenarios. First, treatment with DAAs was assumed to or equal to 3.25. Decompensation was identified by a previously validated algorithm. 26 The modeled cohort comprised a total of 142,147 patients with a mean age of 63 years. This cohort reflected the patients with HCV eligible for treatment in the VA system in 2014. The demographic characteristics of the cohort were based on the VA data to reflect the target population. The baseline distribution of fibrosis stages was genotype 1 (83.8%), 2 (9.2%), 3 (6.1%), 4 (0.8%), and 5/6 (0%). At baseline, the proportion of ethnicity, alcohol use by the validated alcohol use disorder questionnaire (AUDIT-C), 24 concomitant liver cancer (by International Classification of Diseases, Ninth/Tenth Revision [ICD-9/10] codes), laboratory tests required to calculate noninvasive fibrosis 4 score (FIB-4), MELDNa, and electronic Child-Turcotte-Pugh score indicating liver disease severity were obtained as previously described. 25 Cirrhosis was defined as the presence of ICD-9/10 codes for cirrhosis and FIB-4 greater than or equal to 1.45 or, in absence of ICD-9/10 code, a FIB-4 greater than

FIGURE 1
Model Diagram

UTILITY VALUES
Utility values were sourced from the literature. [40][41][42][43][44] A utility value was assigned to each health state modeled ranging between 1 (perfect health) and 0 (death) representing the quality of life for patients in that health state (Supplementary Table 1). It was assumed that there are no utility differences between treatment-naive and treatmentexperienced patients.

MODEL OUTCOMES
Model outcomes included the number of advanced liver disease events over a lifetime horizon for each scenario (eg, number of CC, DCC, HCC, post-LT, and liver-related mortality events), total costs on both a patient and population level, and cost-effectiveness outcomes including total lifeyears (LYs) and quality-adjusted life-years (QALYs).

SENSITIVITY ANALYSES
One-way sensitivity analysis was conducted to examine the robustness of model results by varying one parameter at a time to examine changes in the net monetary benefit (NMB). NMB is a summary statistic that represents the value of an intervention in monetary terms when a willingness to pay threshold for a unit of benefit (eg, QALY). Parameters were varied by ±10% of their base-case values. The probabilistic sensitivity analysis randomly sampled parameters from within chosen distributions over 5,000 iterations.

TOTAL TREATED PATIENTS
In the DAA scenario, 85% (120,825) of patients were treated and 15% (21,322) were not treated in the analysis period. In contrast, in the pre-DAA period, only 12% (17,058) patients were estimated to be treated and 88% (125,089) with pre-DAA regimens. In the untreated scenario, 100% of patients were not treated.
be reflective of regimens available from 2014 onward and used in the VA. The regimens for DAAs included in the analysis were SOF/PR, SOF/RBV, SOF/SIM, SOF/DAC, SOF/VEL, OBV, DSV and RTV-boosted PTV, GLE/PIB, ELB/GRZ, SOF/ VEL/VOX, and LDV/SOF. Second, treatment with pre-DAA regimens was assumed to include PR, PR/BOC, and PR/ TPV. Third, a scenario for no treatment was included in the model. The US Food and Drug Administration prescribing information was used for each treatment to determine dosing and duration of therapy.

TRANSITION PROBABILITIES
Supplementary Table 1 (available in online article) summarizes annual transition probabilities between health states, which were derived from data specific to the VA (data on file) as well as from the literature. 27-33 It was assumed that patients will not experience disease progression during the initial first year of treatment. Achieving SVR was assumed to reduce disease progression in patients with NC, CC, and DCC. 34 In addition, patients with stage 3 (F3) and stage 4 (F4) fibrosis achieving SVR were assumed to experience fibrosis regression. 35

COST INPUTS
The model accounted for direct costs such as treatmentrelated costs and health state costs (data on file). Given the limited availability of net prices for all products in this analysis, wholesale acquisition costs were used and sourced from IBM Micromedex RED BOOK. 36 Health state costs and treatment monitoring costs for pre-DAA treatments were derived from the VA (data on file). For these cost estimates, Health Economics Research Center (HERC) average cost estimates and Fee-Basis costs were used for outpatient and inpatient care within the VA and external costs, respectively. For outpatient care, HERC uses relative values from Medicare's Resource-Based Relative Value System to assign costs to 12 different categories of outpatient care. HERC estimates the cost of inpatient stays based on a regression model that uses Diagnosis Related Groups weight, intensive care unit days, length of stay, and patient characteristics to estimate cost-adjusted charges using Medicare Relative Value Units. Cost of outpatient pharmacy was obtained from Managerial Cost Accounting (also known as Decision Support System) data. 37,38 For untreated patients, costs were calculated for each year of follow-up until death or lost to follow-up. For treated patients, costs were categorized temporally relative to treatment initiation as follows: Year -2 included days -730 to -366; Year -1 included days -365 to -1; Antiviral period day s0 to 90 days after treatment completion; Year +1 from day 90 to 455 after treatment completion; Year +2 from day in cost savings on a per-patient basis due to a reduction in advanced liver disease events and corresponding costs. Total predicted cost savings were $49,969 and $62,576 for patients who received DAA treatments compared with pre-DAA treatments and untreated, respectively (Table 1).
Further, the DAA treatment strategy also resulted in cost savings over a lifetime horizon. Total discounted cost savings of $7 and $9 billion over a lifetime (50 years) horizon were predicted for patients who received DAA treatments compared with patients treated with pre-DAA treatments and those who were untreated, respectively (Table 1). Furthermore, cost savings were achieved quickly after treatment, with DAAs being cheaper when compared with both the pre-DAA and untreated scenarios within 5 years (Figure 3).

COST-EFFECTIVENESS OUTCOMES
On a per-patient level, the DAA scenario conferred more LYs and QALYs than the pre-DAA scenario: 0.61 and 1.01 per patient with HCV, respectively ( Table 2). In addition, the DAA scenario conferred more LYs and QALYs than the untreated scenario: 0.65 and 1.07 per patient with HCV, respectively

ESTIMATED HEALTH OUTCOMES
Over a lifetime horizon, the use of DAAs resulted in a significant reduction in advanced liver disease events. More advanced liver disease cases occurred in the pre-DAA vs DAA cohort (Figure 2). Compared with the pre-DAA cohort, the reductions in advanced liver disease cases in the DAA cohort were as follows: 73% reduction in CC (25,624 vs 6,969), 69% reduction in DCC (5,194 vs 1,586), 59% reduction in HCC (9,442 vs 3,857), 58% reduction in LT (119 vs 50), and 58% reduction in liver-related deaths (18, 383 vs 7,730).
Similarly, more advanced liver disease cases occurred in the no-treatment cohort than in the DAA cohort ( Figure  2). Compared with the untreated cohort, the reductions in advanced liver disease cases with the DAA cohort were as follows: 74% reduction in CC (26,825 vs 6,969), 71% reduction in DCC (5,410 vs 1,586), 60% reduction in HCC (9,732 vs 3,857), 59% reduction in LT (122 vs 50), and 59% reduction in HCV-related deaths (18,983 vs 7,730).

COST OUTCOMES
The DAA treatment strategy incurred higher initial costs owing to higher drug costs. However, this strategy resulted

Discussion
Using Markov modeling with real-world cost and outcome inputs from a large integrated health system, we demonstrate that treating patients with HCV with DAAs results in substantial cost savings and improvement in health outcomes over their lifetime. Saving and outcomes were higher when compared with pre-DAA regimens as well as with no treatment. Further, cost savings were achieved within 5 years after treatment with DAAs, being less expensive when compared with both the pre-DAA and untreated scenarios. Despite high initial treatment costs and expanded access, the use of DAAs was a cost-effective strategy compared with the pre-DAA era and no-treatment scenario, driven by cost offsets stemming from a reduction in advanced liver disease events.
To the best of our knowledge, this is the first study that assessed the cost-effectiveness of all oral HCV DAA regimens compared with pre-DAA regimens or no treatment from the VA payer perspective. The VA has treated more than 100,000 HCV-infected veterans since January 2014, with cure rates exceeding 90%. 45 From a clinical perspective, there is strong evidence that DAA therapy has significantly reduced decompensation, HCC, and liver-related and all-cause mortality related to HCV in US veterans. [46][47][48] We similarly found that DAA therapy resulted in a 74% reduction in progression to cirrhosis, a 71% reduction in incident decompensation among patients with cirrhosis, a 60% reduction in HCC, and a 59% reduction in liver-related deaths. These outcome improvements are associated with significant treatment costs but could result in long-term cost savings, as has been suggested by analysis from pre-DAA and early DAA cohorts. 49,50 Maier et al assessed the impact of SVR from interferon-based regimens prior to 2014 in the US veteran population, finding cost savings only among patients with cirrhosis ($9,474 per patient) after 9 years of follow-up whereas a net cost increase was predicted among non-cirrhotic individuals. 49 Chidi et al evaluated the cost-effectiveness of the first-generation DAA therapy with various strategies related to treatment prioritization, finding that OBV-based regimens conferred long-term cost savings to the VA system ($67.6M) relative to no treatment. 50 Our study found even greater cost savings for patients treated with DAA over a lifetime horizon-$7 and $9 billion compared with patients treated with pre-DAA treatments and those who were untreated. Cost savings were evident at year 5 after treatment, similar to findings suggested in a study modeling the Australian "treat-all" approach adopted in 2016. 51 DAA treatment strategies were dominant in the incremental cost-effectiveness analysis, with greater LYs and QALYs and lower cost. An observational study ( Table 2). The DAA scenario dominated (ie, more clinically effective and less costly) when compared with both the pre-DAA and untreated scenarios on a per-patient basis.
At a cohort level, the DAA scenario conferred more LYs and QALYs than the pre-DAA scenario: 86,863 and 142,864 per patient, respectively ( Table 2). In addition, the DAA scenario conferred more LYs and QALYs than the untreated scenario: 93,413 and 152,720 per patient, respectively (Table 2). Similar to the per-patient scenario, the DAA scenario dominated when compared with both the pre-DAA and untreated scenarios.

ONE-WAY SENSITIVITY ANALYSIS
Sensitivity analyses were robust when model parameters were varied. In the DAA vs pre-DAA scenario, the NMB was most sensitive to the proportion of treatment-naive patients in the pre-DAA cohort, the proportion of patients with NC in the pre-DAA cohort, and the proportion of patients with genotype 1 HCV in the DAA cohort (Supplementary Figure 1A). This could be due to a majority of patients being in these subgroups: HCV genotype 1 (83.8%), NC (73%), and treatment-naive patients (94%). In the DAA vs untreated analysis, parameters that influenced NMB the most were the proportion of patients with genotype 1 in the DAA cohort, cost of treatment-naive patients with NC, and proportion of patients treated in the DAA era (Supplementary Figure 1B).

PROBABILISTIC SENSITIVITY ANALYSIS
The probabilistic sensitivity analysis findings were consistent with the base-case analysis. In the current model scenario using discounted costs and QALYs, the DAA scenario dominated both the pre-DAA and untreated scenarios (Supplementary Figure 2).   [56][57][58] substantially higher than pre-DAAs, 59,60 similar to our analysis. Our data confirm and validate similar analyses from integrated health systems in Europe. In these analyses, a marked increase in the absolute number of patients treated with DAA relative to pre-DAA regimens has been observed owing to higher efficacy, better safety profiles, and increased tolerability, which in turn has been demonstrated to reduce population-level HCV-related morbidity and mortality. 61,62 In a modeling study performed for the French national health care system, Leleu et al demonstrated that DAAs result in a total cost saving of €1.1 billion vs pre-DAAs, with an average cost saving of €15,000 per DAA-treated patient. 61 In a modeling study performed for the Spanish health care system, Turnes et al demonstrated that a total cost saving of €468,149,590 was achieved over a lifetime horizon (50 years) with post-DAA strategy compared with pre-DAA. 62

LIMITATIONS
Strengths of this analysis include the detailed clinical, demographic, and cost data in a large, national, diverse cohort. However, our findings should be interpreted in light of their limitations. First, data on reduction in disease progression among patients who have achieved SVR were derived from published literature and not the VA 34 ; however, results were robust across different values of disease progression in the model. Further, our analysis did not consider fibrosis restrictions to treatment, which may overestimate cost savings; of note, DAAs were cost saving in the Spanish analysis that did consider of cost-effectiveness using the data from VA showed that DAA strategy substantially reduces liver disease burden on health care, by reducing liver-related morbidity and mortality and long-term health care costs. Therefore, the findings suggest that the payer systems that had taken an initiative to expand access to DAAs have achieved benefit with substantial cost savings. This has implications for the use of DAAs for the treatment of HCV in other payer settings for both patients and health care systems.
Limited data are available examining post-DAA costs in patients with HCV, and similarly for comparisons of post-DAA vs pre-DAA health care expenditures to validate our findings; however, prior real-world studies have shown increases in treated patients and higher SVR rates after introduction of DAAs vs pre-DAAs, 54,55 supporting the health outcomes observed with our estimated the annual and cumulative impact of DAAs on national Medicaid costs from 2013 through 2022; the magnitude of per-person and overall cost saving estimated appears quite similar to those from the US Medicaid population ($15,907 per year per beneficiary), projected $12 billion system savings from 2013 to 2022. 52 Thus, our data further demonstrate the clinical and cost savings of expanded DAA access in the United States. Despite scientific information and guideline recommendations for DAAs, the high price of these drugs has been the major obstacle, preventing access to HCV treatment for those in need. This has led to affordability-and access-related issues resulting from payer-driven rationing of care in the United States. 53 However, some health systems such as VA had developed a national strategy to eradicate HCV infection. 20 The current assessment  mortality were not captured in this analysis for these subpopulations. Fourth, the societal perspective to examine the impact of the treatment regimens on wider social opportunity costs (eg, lost productivity, informal care) was not considered by the analysis. Incorporating such a perspective would lead to greater gains for DAA regimens given the reduction in advanced liver disease events, which are known to impact work productivity and participation in the workforce. Finally, the impact of a higher proportion of patients achieving cure was not reflected in terms of possible downstream impacts on HCV incidence and prevalence. We would expect greater gains in HCV-related morbidity and mortality, as well as in terms of the economic impact if the curative impact of DAA therapy on disease transmission was also accounted for in the model. Costs of care expended in the VA are generally lower than those in other US health care systems 63 ; therefore, the magnitude of these findings may not directly translate to the US Medicare-insured or commercially insured populations. However, we expect the direction of cost savings to be similar.

Conclusions
The use of DAA-based treatments in patients with HCV in the VA significantly reduced long-term HCV-related morbidity and mortality, resulting in lifetime cost savings and cost savings within 5 years of treatment. fibrosis restriction to treatment. 62 Therefore, the exclusion of this consideration may not impact our findings to a greater extent. Second, drug costs were calculated based on published wholesale acquisition costs, 36 which may not reflect the actual cost of drugs paid by the VA. We note that the wholesale acquisition cost prices are certainly higher than the net prices paid by the VA, which would be conservative against DAAs, as they would be more greatly discounted, particularly in recent years with the introduction of generic SOF/VEL and GLE/PIB. Incorporation of net pricing would likely reduce the upfront financial impact of DAAs, reducing the time to "breakeven" of investment.